Financial Planning For Late Starters In Five Steps

You know financial planning matters, like going to the doctor and keeping up with your taxes. For too many Americans, though, it turns into an obstacle, a burden that seems to grow until it’s daunting to even consider.

Time to get over that, even if you think it’s too late.

The reason why is simple: It’s never too late to plan well. And you’ll live longer in retirement than you believe is possible. Here are some steps to take, even if you’re over 50:

1. Save more, starting now

The years from 50 to 65 will fly by. But that’s still a good chunk of time. You should expect your retirement savings to more than double in 15 years, easily. So start adding to it by deferring income into an IRA, 401(k) or both, pronto.

2. Do the catch-ups

If you’re over 50, the IRS allows you to defer even more. In an IRA, it’s an extra $1,000. In a workplace 401(k), the figure is $5,500. If you use a health savings account and you’re over 55, you can put in another $1,000 as well.

The reason they are called catch-ups is the government knows how long you will live in retirement. A few thousands bucks set aside today will compound nicely over decades in retirement, but you have to save the money first.

3. Invest in new skills

If you’ve made no plans and somehow have a great retirement set, you can coast into your 60s with little worry. If not, you’ll likely need to work. It may be time to consider a new field or adding to the skill set you have.

Don’t count on your company holding on to you all the way to retirement age. Rather, make it worth their while to do so by reengaging on the job and learning  more. If downsizing comes anyway, at least you’ll be ready to interview for the next job with more confidence in your abilities.

4. Reconsider where you live

People often move to lower-cost states well after the time when such changes would have helped. If you think there’s a good chance you will move at retirement, start looking over your options now. It might be a better choice to move today, even with the disruptions, than in two or five years when the real estate markets are different.

5. Set up a realistic portfolio

Besides saving more, you need to find a way to build  your retirement while minimizing risk. Research shows that passive investing is by far the most dependable method of creating a strong, resilient portfolio. Doing so at minimal cost also is important, at any age.

You can save your own retirement with serious financial planning, even if you start late. The key is to start and stick to it until you succeed.